SANTIAGO – With the International Monetary Fund having just cut its forecasts for economic growth in Latin America for the fifth year in a row, the region’s countries are casting about for ways to reignite investment and boost productivity. They should look to fast-growing Asia, argue advocates of the Transpacific Trade Partnership (TPP), the proposed mega-regional trade accord that would bind together 12 Pacific Rim countries. But should they?

If done right, the TPP could help Mexico, Peru, and Chile – the accord’s Latin American members – make the leap to high-productivity exports based on innovation. But that would require the TPP to foster, not impede, the flow of knowledge around the Pacific Rim.

Regrettably, the United States is insisting on a series of intellectual-property provisions that serve the interests of US-based firms, but do little to create a sound environment for innovation elsewhere. That needs to change – and soon – so that years of talks can be concluded successfully.

The growth challenges for the three Latin American TPP countries are very different. In the last two decades, Mexico has managed to diversify its export base and is now a major supplier of industrial goods to the US and Canada. The bad news is that Mexico’s growth prospects have become inextricably tied to those of its huge neighbor to the north. The good news is that the US is growing faster than any other major industrialized economy, so Mexico can look forward – according to the IMF – to a couple of years of accelerating economic expansion.

Peru and Chile, by contrast, are natural-resource exporters that derived huge benefits from the China-driven commodity boom of the last decade. Today commodity prices are down, and so is growth. Because it is difficult to become ever-more efficient at producing a ton of copper or a pound of fruit (and, in Chile’s case, the grade of copper ore is fast declining), further growth has to come from diversification: moving capital and labor to new sectors, where productivity is higher.

That is where Pacific Rim trade and the TPP come in. A firm in Thailand, the Philippines, or Vietnam can develop a new product line by plugging into the huge East Asian value chain and producing, for example, a tiny component which, along with myriad other components, will be assembled into a smartphone at a factory in China.

Firms in Chile or Peru – or Colombia or Uruguay, for that matter – enjoy no such opportunities. South America is outside the world’s main value chains. Innovative firms face the uphill challenge of developing entire new products and selling them in geographically and economically distant markets.

The TPP could help change this by easing trade in intermediate inputs and helping build Pacific-wide value chains. Particularly valuable would be straightening out the spaghetti bowl of “rules of origin” – the regulations dictating when inputs produced in other countries can be used in products that will qualify for free-trade benefits.

So far so good. Optimists can envision a new generation of trans-Pacific flows of trade, investment, and knowledge, with benefits for all. But then the TPP’s boosters have to contend with the obstinacy of Japanese rice farmers (Prime Minister Shinzo Abe is vowing to address that) and of US patent and copyright holders.

Intellectual property has become one of the most contentious issues in the TPP negotiations, and it is not hard to see why. The US is pushing for longer copyright protection for published works, music, and films. It also wants technical changes that would effectively mean much longer patent terms for pharmaceuticals, make the approval process lengthier for generic drug makers, and extend protections for biologic medicines.

The list of controversial US demands is long. One that has particularly enraged online activists would classify cache copies of websites resulting from Internet searches as temporary copies, so that users would potentially be subject to fines for copyright infringement. There are also concerns about limits to freedom of expression if materials are taken down for alleged copyright violations.

Many of these provisions are absent from international agreements currently in force – such as the World Trade Organization’s TRIPS accord – and from the bilateral free-trade agreements that the US itself has negotiated with a host of countries. In other cases, protection periods would rise considerably. For copyrights, the US is demanding 95 years of protection after publication, or 120 years after creation, whereas TRIPS provides for 50 years and US agreements with Australia, Chile, Korea and Peru specify 70 years.

No one disagrees with the need for strong intellectual-property protection. If inventors cannot expect to be rewarded for their achievements, they will stop inventing or investors will stop funding their ventures. But most economists agree that such incentives must be balanced against the need to accelerate knowledge dissemination and absorption, and that the optimum is somewhere in the middle. In this sense, the US demand for longer terms of patent and copyright protection is arbitrary, because they are not founded on a clear-cut case for enhanced economic efficiency.

The politics of the issue is tricky for the TPP’s Latin American members. All three have negotiated intellectual-property agreements with the US, achieving what seemed like mutually agreeable levels of protection. Why should that change now?

The conundrum is especially vexing for Chile, a country that already has bilateral trade agreements with every potential member of the TPP. If Chile is unlikely to gain substantial new market access, ask critics, why should Chile make trade concessions at all?

That is going too far. Precisely because of the urgent need to diversify their exports, Chile, Peru, and other middle-income countries could benefit tremendously from agreements like the TPP. But that potential will be realized only if more knowledge, not less, flows across member countries’ borders.

The US itself would benefit from having trade partners that can innovate, instead of serving only as passive buyers for American movies and songs. The sooner US trade negotiators understand that, the better for everyone.

OVER $13 trillion is sitting in American bank accounts and money-market funds, earning little or no interest. If consumers were even marginally more demanding, they could earn tens of billions of dollars in extra returns. That is the premise behind MaxMyInterest, a year-old electronic service aimed at slothful but yield-hungry savers. It offers to move money from banks that want to shed deposits, and that therefore pay savers low interest, to ones in need of them, and so willing to pay more. At the same time, it makes sure that each account holds no more than $250,000, the maximum amount insured by the government, providing not just higher returns, but risk-free ones.The average interest paid on deposits in America is a microscopic 0.09% a year, according to BankRate, a data firm. MaxMyInterest’s clients receive 0.75% to 1.05%, with a weighted average of almost 1%. That may seem small, but it amounts to $2,000 a year for every $250,000 account, and should rise considerably whenever the Federal Reserve starts to raise rates. (At a meeting this week the central bank left rates unchanged, but it is still expected to start lifting them later this year.)So far JPMorgan Chase, Citibank, First Republic, Wells Fargo and Bank of America—all titans of American banking—are working with MaxMyInterest to shift excess cash out of the accounts of willing customers. Meanwhile, Barclays, GE Capital, American Express, Ally Financial and Capital One 360 (formerly ING Direct) have signed up to receive money. Each side of the transaction has its own incentives to take part. The recipients want more deposits to fund lending: equipment leases in GE’s case, car loans in Ally’s, and credit cards for the others. MaxMyInterest allows them to raise money cheaply, and therefore to make more loans, without having to build a network of branches.The incentive to co-operate for the banks relinquishing cash is more complex. They fear that a customer with more than $250,000 in his account might open a new one elsewhere, to benefit from deposit insurance. The second bank, in turn, might start offering the customer lucrative services such as wealth management. To avoid such competition, the first bank would rather steer the extra cash to less threatening internet-only outfits.Such an approach also defuses a regulatory problem. Regulators require big banks to hold especially high amounts of liquid assets against uninsured deposits. But banks earn next to nothing on these investments, making such deposits unprofitable. In response, big banks have begun discouraging them by levying fees and the like. That annoys their best customers. Steering such deposits through MaxMyInterest allows the banks to save money while appearing more concerned with their customers’ fortunes than their own.The idea of getting around the cap on deposit insurance is not a new one. A firm called Promontory Interfinancial Network distributes companies’ cash in $250,000 chunks to banks throughout America, for instance. But if outfits like MaxMyInterest succeed in steering a significant amount of deposits to the specialist lenders in need of them, it could spell trouble for money-market funds in particular. They only came into being, after all, thanks to the caps on deposit rates that applied until the 1980s. They are not explicitly insured, and currently offer minuscule returns.Big banks should beware, too. They may benefit at the moment, but the spread of such services will make it easier for savers to shop around for higher rates. That would squeeze banks’ margins, and perhaps even change their funding models.

Long-feared turning point in the global monetary cycle may be delayed yet again, offering another reprieve for dollar debtors across the world.

By Ambrose Evans-Pritchard, in Washington

7:38PM BST 01 May 2015

The labour participation rate is still at a 37-year low of 62.7pcPhoto: Alamy

A key indicator of manufacturing jobs in the US has dropped to its lowest level since the financial crisis as industry remains stuck in the doldrums, dashing hopes for a swift rebound after the economy ground to a halt in the first quarter.

The surprisingly weak data greatly reduce any likelihood the US Federal Reserve will raise rates in June for the first time in eight years, once again putting off the long-feared turning point in the global monetary cycle and perhaps offering another reprieve for dollar debtors across the world.

The closely-watched index of the Institute for Supply Management (ISM) remained anaemic in April, confirming fears that the strong US dollar and energy crash in the once-booming shale states are taking a serious toll.

The employment component dropped sharply to 48.3, below the “boom-bust line” of 50 and the lowest in almost six years. The relapse is likely to set off alarm bells at the Fed, where chairman Janet Yellen pays very close attention to the labour market.

Overall manufacturing output failed to pick up as expected, remaining at a two-year low of 51.5, and looks too weak to power a full recovery in the second quarter.

ISM jobs index

There is now a clear risk that the US economy may slow to “stall speed” under the Fed’s model, defined as a “slow-growth phase at the end of expansions before falling into a recession”. This would be ominous at a time when the developed world has yet to shake off the legacy of the Lehman crisis, is struggling with record debt ratios and has already used up most of its fiscal and monetary ammunition. This time the “Bric” nations - Brazil, Russia, India and China - are also in trouble, and cannot easily step into the breach with fresh stimulus.

There is now a clear risk that the US economy may slow to 'stall speed'

A separate report by Markit found that US manufacturing output in April fell to its lowest level this year, depressed by declining exports. Markit’s Chris Williamson said the survey follows a “growing clutch of disappointing numbers” that will force the Fed to hold back until a clearer picture emerges. “Any policy tightening looks likely to be deferred until at least September,” he said. Warren Buffett, the chairman of Berkshire Hathaway, said the Fed is caught in a bind. Quantitative easing in Europe has created a huge gap in yield differentials, driving funds across the Atlantic into the US debt markets and driving up the dollar. Any Fed tightening would risk making matters worse. “I think it would be very hard for the Fed to bump rates up here with negative rates in Europe,” Mr Buffett told CNBC. The weak jobs data will revive a row over how strong the US labour market really is. The unemployment rate has almost halved to 5.5pc and job vacancies are - on paper - more abundant than they were at the peak of the pre-Lehman boom. The number of people claiming jobless benefits fell to a 11-year low of 262,000 last week.

Yet wages have failed to pick up as expected. Average pay growth for non-supervisory workers has languished at 1.6pc over the past year and has actually slowed to a rate of 0.8pc in the past three months. “There is more slack than meets the eye,” said the International Monetary Fund.

Huge numbers of people dropped out of the workforce after the financial crisis and have yet to be drawn back into the system. The labour participation rate is still at a 37-year low of 62.7pc. The rate for males has dropped from 73.8pc to 69.3pc since 2007, a drastic fall that cannot be fully explained by changing technology or “structural” problems. A new paper by Danny Blanchflower and Andrew Levin for the National Bureau of Economic Research argues that there are still large numbers of people with part-time jobs who want to work full-time. Once all forms of “hidden unemployment” are included, the shortfall reaches 3.3m jobs. The real unemployment rate is around 7.5pc. This means the US is still a long way from the inflexion point when a tight labour market sets off a wage spiral. “Monetary policy tightening would be premature at the present time. Indeed, such a policy move would be a serious mistake,” the paper stated. Mr Blanchflower said the Fed will not be able to raise rates this year, whatever the hawks may suggest. The paper may reflect the broad thinking of Ms Yellen, who tracks an array of under-employment indicators and is likely to move with great caution under her “balanced approach rule”. The futures markets have now pushed out the first rate rise to September. Citigroup doubts that there will be any action until December. The crucial confirmation either way will come next week with the release of non-farm payroll data. If the jobs market fails to recover yet again it will be impossible to keep blaming the relapse on a polar winter. The cherry blossoms have already been and gone in Washington. We are in May.

I've seen the liberal lying MSM pondering how WE could allow the riots, looting, burning and lawlessness to happen, as if it is our collective fault. Obama stands before his teleprompter and pontificates about the need for us to end the poverty that supposedly led to Purge Night in Charm City. That term cracks me up. The city has so much charm, its football team once snuck out of town overnight and headed to Indianapolis. It has so much charm its baseball team was forced to play a game with no fans in the stands.

I think most people can agree that Freddie Gray, a petty drug dealer, was killed in police custody for the crime of looking suspicious. The policemen who killed him deserve to go to jail for murder. As usual, the powers that be circled the wagons and intended to exonerate the hero first responders. The people of Baltimore had a right to be pissed. They had a right to protest.

They didn't have a right to burn businesses and cars. They didn't have the right to riot, loot, and injure others.

It is the police department created and controlled for decades by Democratic progressive politicians that has committed the atrocities against the people who have been electing these progressives year after year. Baltimore has a corrupt, reckless, out of control police department enabled by a crooked and incompetent Baltimore politicians. The rap sheet for Baltimore's finest is long:

Police commissioner Ed Norris was sent to prison on corruption charges (2004)

Two detectives were sentenced to 454 years in prison for dealing drugs (2005)

An officer was dismissed after being videotaped verbally abusing a 14-year-old and then failing to file a report on his use of force against the same teenager (2011)

An officer was been fired for sexually abusing a minor (2014)

The city paid a quarter-million-dollar settlement to a man police illegally arrested for the non-crime of recording them at work with his mobile phone.

The cries of racism and white oppression ring hollow. It's a tired storyline. Facts are always inconvenient to race baiters with an agenda to extract more money from whites with a guilty conscience and the inability or unwillingness to speak the truth. Let's examine some facts about good old Charm City, USA.

The fine citizens of this metropolis have not elected a Republican as mayor since 1963, before the War on Poverty began. That mayor's 4 year term is the only interruption in Democrat rule since 1947. They have had Democrat control for 64 of the last 68 years, and sole control for the last 48 years straight.

Their mayor is black. Their previous mayor, Sheila Dixon, was black. She was convicted of embezzlement in 2010 and couldn't finish her term. They had a white mayor (current Democratic Presidential hopeful Martin O'Malley) for eight years. The mayor before him was black.

Their City Council consists of 15 members. All fifteen are Democrats. The Council President is black. Democrats have had control of legislation in Baltimore for the last 50 years. Every program, policy, initiative, or school curriculum that exists in Baltimore was enacted by liberal Democrats.

The Police Commissioner is black. Approximately 50% of the police force is black.

The School Superintendent is black, along with the School Board. The district has an annual budget of $1.32 billion to teach 84,000 kids. The Baltimore school system ranks second among the nation's 100 largest school districts in how much it spent per pupil at $15,700 per student. Only NYC spends more. Only two thirds of students graduate high school, despite this high level of spending.

The average SAT scores of Baltimore City public school students are: 379 in Reading; 376 in Math; 381 in Writing. These are the scores of the best of the best in Baltimore schools who actually think they should get into college. The average scores in the country, which still suck, are around 500. Students with these scores have about a 15% chance of graduating college. This is the ROI you get after spending $188,000 per student over their 12 year academic career.

The population of Baltimore is 623,000 and 63% are black. Median household income is $41,000, with 24% living below the poverty line. The home ownership rate is 48%. The percentage of college graduates is 27%.

The population was 950,000 in 1950, so it has fallen by 35% in the last 65 years. The population was 24% black in 1950. Decades of liberal Democrat policies drove most of the white population out of the city.

Baltimore's violent crime rate is 370% higher than the U.S. rate. They have over 200 murders, 300 rapes, 3,600 robberies, 4,600 assaults, 7,800 burglaries, and 22,000 thefts per year. These are all 2 to 4 times the U.S. averages per 100,000 people.

Over 35% of all Baltimore residents get food stamps. Over 85% of the kids get free breakfasts and lunches at school. More than 60% of Baltimore residents are receiving some form of government assistance.

Baltimore's welfare paradise is paid for by outrageously high taxes. It's income tax rate of 3.2% is on top of the state rate of 4.75%. It's property tax rate is more than double the other counties in Maryland. The sales tax rate is 6%. Corporations pay an income tax rate of 8.25%.

The percentage of out of wedlock births to black women in Baltimore exceeds 72%. Baltimore and Detroit are the two cities with populations over 600,000 with the highest percentage of single parent households - 59% to 61%.

The reported unemployment rate for Baltimore is 8.2%, one of the highest in the country. In reality, 42% of the working age population is not working. Young black men between the ages of 20 and 24 have a reported unemployment rate of 37%. But in reality, it is north of 60%. The number of employees in 1990 totaled 475,000. Today they total 365,000, down 23%.

It doesn't take a village to raze, burn, and loot a village. It just takes 50 years of liberal economic and social policies. Of course the liberal media, liberal politicians, and liberal voters don't think anyone should be blamed for the disaster that Baltimore and every other Democrat controlled urban shithole (Detroit, Philadelphia, St. Louis, Atlanta, Cleveland) have become over the last 50 years. Community organizer Adam Jackson, living up to the standards of Organizer in Chief Obama, declared that in Baltimore "the Democrats and the Republicans have both failed." At least progressive community organizers have a sense of humor. How can Republicans have failed if the mayors and City Council have been 100% Democrat since the mid 1960s? I wonder how many Republicans were among the youths burning, looting, and destroying the city this week.No Republican, and definitely no conservative, is responsible for the poverty, crime, educational failure, and disintegration of this lesson in Democratic rule. Baltimore's police department is the product of the progressive wing of the Democratic party, enabled by black identity politics. This is entirely a left-wing Democratic creation. They get all the credit for what Baltimore has become. The mayor of Baltimore is an incompetent bumbling fool. These corrupt, arrogant left wing boobs are incapable of running a school system, police department, or economy.They know how to play race politics to get elected. They know how to increase taxes on the few remaining producers in order to redistribute it to their black voters. They know how to destroy businesses and jobs. They know how to create a welfare mindset among black people, enslaving them in poverty, dependency, and ignorance. Blacks have suffered the most from Democratic black rule. These riots will result in less businesses, less jobs and less taxes for the city. Blacks will be hurt the most, but they will continue to vote for Democrats. Insanity is doing the same thing over and over and expecting a different result. Believing liberal welfare policies will fix the problems created by liberal welfare policies is insane. Liberalism is a disease of the brain and has infected a vast swath of America, especially in urban enclaves across the land.Baltimore and every other Democrat controlled urban enclave in America are destined for decline, destruction, and civic decay. Baltimore cannot be fixed by spending more money on welfare programs. The country has spent $22 trillion on anti-poverty programs since LBJ declared his war on poverty. They haven't moved the dial on poverty one iota. They have created generations of dependent black people, trapped in urban ghettos like Baltimore. If you can't educate children for $15,700 per year, then you won't educate them any better for $18,000 per year. Liberals will never admit their policies, programs, and corrupt practices created this national disaster.Liberal welfare policies have encouraged and rewarded out of wedlock births. The 72% black out of wedlock birth rate is the single biggest cause of Baltimore's long-term decline. Children without fathers are destined to be uneducated, unemployed, and underachieving. Children raised by married working parents who provide good role models are not on the streets. They are studying. They are not looting, killing, robbing or having kids when they are teenagers. There are no guarantees in life, but being stupid, lazy and ignorant guarantees a life of poverty. Liberal welfare policies pay these people to have more kids out of wedlock in order to maximize their welfare payments. There have now been three generations of black people entrapped by these demented welfare programs.There is no will among the recipients or distributors of race based welfare payments to change their policies or programs. Therefore, every time a white cop kills a black person or a white store owner kills a black thief in Baltimore or any urban ghetto, the potential for riots, looting, and burning of businesses will rear its ugly head. The only guarantee is the liberals running the urban ghetto will not accept blame for what they have wrought. Farewell to the America of personal responsibility, work ethic, marriage, family, and valuing education.The esteemed mayor of Baltimore Stephanie Rawlings-Blake (of course a liberal black woman must hyphenate her name) summed up the disease of liberalism after her peeps had destroyed their neighborhoods the night before:

"It's a very delicate balancing act, because while we tried to make sure that they were protected from the cars and the other things that were going on, we also gave those who wished to destroy space to do that as well."

If you know the other and know yourself, you need not fear the result of a hundred battles.

Sun Tzu

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.